Which of the Following Statements Is FALSE

question 44

Multiple Choice

Which of the following statements is FALSE?

• A)Researchers have hypothesized that boards with a majority of outside directors are better monitors of managerial effort and actions.
• B)Studies have found that firms with independent boards make fewer value-creating acquisitions but are more likely to act in shareholders' interests if targeted in an acquisition.
• C)One early study showed that a board was more likely to fire the firm's CEO for poor performance if the board had a majority of outside directors.
• D)Although the firm's stock price increases on the announcement of its addition of an independent board member,the increased firm value appears to come from the potential for the board to make better decisions on acquisitions and CEO turnover rather than from improvements in the firm's operating performance.

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Definitions:

Substitution Effect

The adjustment in consumer behavior because of shifts in the prices of goods relative to each other, causing consumers to choose different goods over previously preferred ones.

Normal Good

A good whose demand increases as consumer income increases, demonstrating how economic well-being influences consumer choices.

Child Tax Credit

A tax benefit offered to families with children, providing a reduction in their tax liability per child.

Labor Supplied

Refers to the total hours of work that workers are willing and able to provide at a given wage rate over a certain period.